EX-99.1 2 exhibit991q4-2015.htm PRESS RELEASE OF SUPER MICRO COMPUTER, INC. Exhibit 991 Q4-2015

Exhibit 99.1
Super Micro Computer, Inc. Announces 4th Quarter 2015 Financial Results
SAN JOSE, Calif., August 4, 2015 (BUSINESS WIRE) -- Super Micro Computer, Inc. (NASDAQ:SMCI), a global leader in high-performance, high-efficiency server, storage technology and green computing, today announced fourth quarter and full-year financial results for the fiscal year ended June 30, 2015.
Fiscal 4th Quarter Highlights

•
Quarterly net sales of $573.6 million, up 21.7% from the third quarter of fiscal year 2015 and up 34.0% from the same quarter of last year.
   
•
GAAP net income of $26.7 million, up 15.8% from the third quarter of fiscal year 2015 and up 61.4% from the same quarter of last year.

•
GAAP gross margin of 15.6%, down from 16.3% in the third quarter of fiscal year 2015 and up from 15.5% in the same quarter of last year.

•
Server solutions accounted for 61.7% of net sales compared with 64.1% in the third quarter of fiscal year 2015 and 55.2% in the same quarter of last year.

Net sales for the fourth quarter ended June 30, 2015 totaled $573.6 million, up 21.7% from $471.2 million in the third quarter of fiscal year 2015. No customer accounted for more than 10% of net sales during the quarter ended June 30, 2015.
GAAP net income for the fourth quarter of fiscal year 2015 was $26.7 million or $0.51 per diluted share, an increase of 61.4% from net income of $16.5 million, or $0.34 per diluted share in the same period a year ago. Included in net income for the quarter is $4.0 million of stock-based compensation expense (pre-tax). Excluding this item and the related tax effect, non-GAAP net income for the fourth quarter was $30.0 million, or $0.57 per diluted share, compared to non-GAAP net income of $19.4 million, or $0.40 per diluted share, in the same quarter of the prior year. On a sequential basis, non-GAAP net income increased from the third quarter of fiscal year 2015 by $5.1 million or $0.10 per diluted share.
GAAP gross margin for the fourth quarter was 15.6% compared to 15.5% in the same period a year ago. Non-GAAP gross margin for the fourth quarter was 15.7% compared to 15.6% in the same period a year ago. GAAP gross margin and Non-GAAP gross margin for the third quarter of fiscal year 2015 were both 16.3%.
The Company's cash and cash equivalents and short and long term investments at June 30, 2015 were $98.1 million compared to $99.6 million at June 30, 2014. Free cash flow for the year ended June 30, 2015 was $(79.7) million, primarily due to an increase in the Company's cash used by operating activities and the development and construction of improvements on the Company's property, which is completed in the beginning of August 2015.
Fiscal Year 2015 Summary
Net sales for the fiscal year ended June 30, 2015 were $1,991.2 million, up 35.7% from $1,467.2 million for the fiscal year ended June 30, 2014. GAAP net income for fiscal year 2015 increased to $101.9 million, or $2.03 per diluted share, an increase of 88.1% from $54.2 million, or $1.16 per diluted share, for fiscal year 2014. Excluding $9.7 million of stock based-compensation expense and related tax effect, non-GAAP net income for the fiscal year 2015 was $111.6 million or $2.15 per diluted share, an increase of 77.4% compared to $62.9 million or $1.34 per diluted share for fiscal year 2014.
Business Outlook & Management Commentary
The Company expects net sales of $520 million to $580 million for the first quarter of fiscal year 2016 ending September 30, 2015. The Company expects non-GAAP earnings per diluted share of approximately $0.49 to $0.59 for the first quarter.
“Supermicro delivered record revenues in the fourth quarter of 34% growth over last year and posting $1.99 billion for the full fiscal year 2015 which was 35.7% above last year. Revenue related to our storage solutions grew 79% year over year in the fourth quarter as storage has become a strategic growth segment with contributions from both traditional and next generation storage solutions. Our FatTwin solutions were also a key growth driver this quarter with over 100% growth year over year and sales of our new MicroBlade solutions grew strongly for a new product category,” said Charles Liang, Chairman and CEO. “Looking to 2016 we have never been stronger in terms of leading products like Ultra, GPU/Xeon Phi, Storage, MicroBlade, and our software and service offerings. In order to support our growth, we are in the process of completing a 30% capacity addition in our San Jose and Europe manufacturing operations. We believe that we are well positioned for continued growth and market share gains.”
It is currently expected that the outlook will not be updated until the Company’s next quarterly earnings announcement, notwithstanding subsequent developments. However, the Company may update the outlook or any portion thereof at any time. Such updates will take place only by way of a news release or other broadly disseminated disclosure available to all interested parties in accordance with Regulation FD.
Conference Call Information
Super Micro Computer will discuss these financial results in a conference call at 2:00 p.m. PT, today. To participate in the conference, please call 1-888-437-9445 (International callers dial 1-719-325-2281) 10 minutes prior. A recording


of the conference will be available until 11:59 pm (Eastern Time) Tuesday, August 18, 2015 by dialing 1-877-870-5176 (international callers dial 1-858-384-5517) and entering replay PIN 5322120. The live web cast and recording of the call will be available on the Investor Relations section at www.supermicro.com two hours after the conference conclusion. They will remain available until the Company's next earnings call.
Cautionary Statement Regarding Forward Looking Statements
Statements contained in this press release that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate, among other things, to our expected financial and operating results, our ability to build and grow Super Micro Computer, the benefits of our products and our ability to achieve our goals, plans and objectives. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated. These include, but are not limited to: our dependence on continued growth in the markets for X86, blade servers and embedded applications, increased competition, difficulties of predicting timing, introduction and customer acceptance of new products, poor product sales, difficulties in establishing and maintaining successful relationships with our distributors and vendors, shortages or price fluctuations in our supply chain, our ability to protect our intellectual property rights, our ability to control the rate of expansion domestically and internationally, difficulty managing rapid growth and general political, economic and market conditions and events. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings.
Use of Non-GAAP Financial Measures
Non-GAAP gross margin discussed in this press release excludes stock-based compensation expense. Non-GAAP net income and net income per share discussed in this press release exclude stock-based compensation expense and the related tax effect of the applicable items. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, detailed reconciliations between the Company's GAAP and non-GAAP financial results is provided at the end of this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings.
About Super Micro Computer, Inc.
Supermicro® (NASDAQ: SMCI), a global leader in high-performance, high-efficiency server technology and innovation is a premier provider of end-to-end green computing solutions for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and Embedded Systems worldwide. Supermicro's advanced Server Building Block Solutions® offer a vast array of components for building energy-efficient, application-optimized, computing solutions. Architecture innovations include Twin, FatTwin™, MicroCloud, MicroBlade, SuperBlade®, Double-sided Storage®, Battery Backup Power (BBP®) modules and WIO/UIO. Products include servers, blades, GPU systems, workstations, motherboards, chassis, power supplies, storage, networking, server management software and SuperRack® cabinets/accessories delivering unrivaled performance and value.
Founded in 1993 and headquartered in San Jose, California, Supermicro is committed to protecting the environment through its "We Keep IT Green®" initiative. The Company has global logistics and operations centers in Silicon Valley (USA), the Netherlands (Europe) and its Science & Technology Park in Taiwan (Asia).
Supermicro, FatTwin, UltraTwin, TwinPro, SuperBlade, Double-Sided Storage, BBP, SuperRack, Building Block Solutions and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc. All other brands, names and trademarks are the property of their respective owners.




SUPER MICRO COMPUTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
 
June 30,
 
June 30,
 
 
 
 
2015
 
2014
ASSETS
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
95,442

 
$
96,872

 
Accounts receivable, net
322,594

 
212,738

 
Inventory
 
463,493

 
315,837

 
Deferred income taxes – current
17,863

 
16,842

 
Prepaid income taxes
7,507

 
5,555

 
Prepaid expenses and other current assets
7,516

 
6,237

 
 
Total current assets
914,415

 
654,081

Long-term investments
2,633

 
2,647

Property, plant and equipment, net
163,038

 
130,589

Deferred income taxes – noncurrent
 
4,497

 
6,154

Other assets
 
 
5,226

 
2,854

 
 
Total assets
$
1,089,809

 
$
796,325

 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
 
$
299,774

 
$
219,354

 
Accrued liabilities
 
46,743

 
37,564

 
Income taxes payable
 
14,111

 
11,414

 
Short-term debt and current portion of long-term debt
93,479

 
42,554

 
 
Total current liabilities
454,107

 
310,886

Long term debt-net of current portion
933

 
3,733

Other long-term liabilities
15,684

 
12,475

 
 
Total liabilities
470,724

 
327,094

Stockholders' equity:
 
 
 
 
 
Common stock and additional paid-in capital
247,081

 
199,062

 
Treasury stock (at cost)
(2,030
)
 
(2,030
)
 
Accumulated other comprehensive loss
(80
)
 
(63
)
 
Retained earnings
 
373,950

 
272,087

 
 
Total Super Micro Computer Inc. stockholders' equity
618,921

 
469,056

 
Noncontrolling interest
164

 
175

 
 
Total stockholders' equity
619,085

 
469,231

 
 
Total liabilities and stockholders' equity
$
1,089,809

 
$
796,325

 
 
 
 
 
 
 




SUPER MICRO COMPUTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Fiscal Year Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Net sales
$
573,594

 
$
428,069

 
$
1,991,155

 
$
1,467,202

Cost of sales
483,828

 
361,672

 
1,670,924

 
1,241,657

Gross profit
89,766

 
66,397

 
320,231

 
225,545

Operating expenses:
 
 
 
 
 
 
 
Research and development
27,741

 
23,023

 
100,257

 
84,257

Sales and marketing
14,195

 
10,755

 
48,851

 
38,012

General and administrative
7,043

 
6,079

 
24,377

 
23,017

Total operating expenses
48,979

 
39,857

 
173,485

 
145,286

Income from operations
40,787

 
26,540

 
146,746

 
80,259

Interest and other income, net
23

 
19

 
115

 
92

Interest expense
(309
)
 
(222
)
 
(965
)
 
(757
)
Income before income tax provision
40,501

 
26,337

 
145,896

 
79,594

Income tax provision
13,799

 
9,788

 
44,033

 
25,437

Net income
$
26,702

 
$
16,549

 
$
101,863

 
$
54,157

Net income per common share:
 
 
 
 
 
 
 
Basic
$
0.56

 
$
0.37

 
$
2.19

 
$
1.24

Diluted
$
0.51

 
$
0.34

 
$
2.03

 
$
1.16

Weighted-average shares used in calculation of net income per common share:
 
 
 
 
 
 
 
Basic (a)
47,327

 
45,017

 
46,434

 
43,599

Diluted (b)
51,990

 
48,317

 
50,094

 
46,512

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation is included in the following cost and expense categories by period (in thousands):

 
 
 
 
 
 
Three Months Ended
June 30,
 
Fiscal Year Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Cost of sales
$
250

 
$
215

 
$
901

 
$
941

Research and development
2,495

 
1,790

 
8,643

 
6,783

Sales and marketing
405

 
335

 
1,553

 
1,260

General and administrative
822

 
539

 
2,602

 
2,078





SUPER MICRO COMPUTER, INC
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
(Unaudited)
 
Fiscal Year Ended June 30,
 
2015
 
2014
OPERATING ACTIVITIES:
 
 
 
Net income
$
101,863

 
$
54,157

Reconciliation of net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
8,133

 
6,364

Stock-based compensation expense
13,699

 
11,062

Excess tax benefits from stock-based compensation
(8,089
)
 
(2,992
)
Allowance for doubtful accounts
326

 
1,476

Provision for inventory
5,928

 
2,254

Exchange gain
(675
)
 
(96
)
Deferred income taxes, net
632

 
65

Changes in operating assets and liabilities:
 
 
 
Accounts receivable, net
(110,182
)
 
(64,874
)
Inventory
(153,584
)
 
(63,921
)
Prepaid expenses and other assets
(2,741
)
 
618

Accounts payable
75,520

 
46,298

Income taxes payable, net
11,951

 
10,880

Accrued liabilities
9,551

 
3,293

Other long-term liabilities
3,032

 
1,954

Net cash provided by (used in) operating activities
(44,636
)
 
6,538

 
 
 
 
INVESTING ACTIVITIES:
 
 
 
Purchases of property, plant and equipment
(35,100
)
 
(40,567
)
Investment in a privately held company
(661
)
 
—

Restricted cash
(416
)
 
406

Net cash used in investing activities
(36,177
)
 
(40,161
)
 
 
 
 
FINANCING ACTIVITIES:
 
 
 
Proceeds from debt
84,900

 
17,354

Repayment of debt
(36,000
)
 
(6,320
)
Proceeds from exercise of stock options
23,338

 
23,928

Excess tax benefits from stock-based compensation
8,089

 
2,992

Payment of obligations under capital leases
(134
)
 
(47
)
Advances (payments) under receivable financing arrangements
33

 
(4
)
Minimum tax withholding paid on behalf of employees for restricted stock awards
(175
)
 
(681
)
Net cash provided by financing activities
80,051

 
37,222

Effect of exchange rate fluctuations on cash
(668
)
 
235

Net increase (decrease) in cash and cash equivalents
(1,430
)
 
3,834

Cash and cash equivalents at beginning of period
96,872

 
93,038

Cash and cash equivalents at end of period
95,442

 
96,872

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
933

 
757

Cash paid for taxes, net of refunds
30,671

 
13,096

Non-cash investing and financing activities:
 
 
 
Equipment purchased under capital leases
442

 
283

Accrued costs for property, plant and equipment purchases
6,826

 
2,021





SUPER MICRO COMPUTER, INC
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Fiscal Year Ended
June 30,
 
 
2015
 
2014
 
2015
 
2014
GAAP GROSS PROFIT
$
89,766

 
$
66,397

 
$
320,231

 
$
225,545

 
Add back stock-based compensation (c)
250

 
215

 
901

 
941

Non-GAAP GROSS PROFIT
$
90,016

 
$
66,612

 
$
321,132

 
$
226,486

 
 
 
 
 
 
 
 
 
GAAP GROSS MARGIN
15.6
%
 
15.5
%
 
16.1
%
 
15.4
%
 
Add back stock-based compensation (c)
0.1
%
 
0.1
%
 
0.0
%
 
0.0
%
Non-GAAP GROSS MARGIN
15.7
%
 
15.6
%
 
16.1
%
 
15.4
%
 
 
 
 
 
 
 
 
 
GAAP INCOME FROM OPERATIONS
$
40,787

 
$
26,540

 
$
146,746

 
$
80,259

 
Add back stock-based compensation (c)
3,972

 
2,879

 
13,699

 
11,062

Non-GAAP INCOME FROM OPERATIONS
$
44,759

 
$
29,419

 
$
160,445

 
$
91,321

 
 
 
 
 
 
 
 
 
GAAP NET INCOME
$
26,702

 
$
16,549

 
$
101,863

 
$
54,157

 
Add back stock-based compensation (c)
3,972

 
2,879

 
13,699

 
11,062

 
Add back adjustments to tax provision (d)
(681
)
 
(31
)
 
(3,955
)
 
(2,303
)
Non-GAAP NET INCOME
$
29,993

 
$
19,397

 
$
111,607

 
$
62,916

 
 
 
 
 
 
 
 
 
GAAP NET INCOME PER COMMON SHARE – BASIC (a)
$
0.56

 
$
0.37

 
$
2.19

 
$
1.24

 
Add back stock-based compensation and adjustments to tax provision (c) (d)
0.07

 
0.06

 
0.21

 
0.20

Non-GAAP NET INCOME PER COMMON SHARE – BASIC (e)
$
0.63

 
$
0.43

 
$
2.40

 
$
1.44

 
 
 
 
 
 
 
 
 
GAAP NET INCOME PER COMMON SHARE – DILUTED (b)
$
0.51

 
$
0.34

 
$
2.03

 
$
1.16

 
Add back stock-based compensation and adjustments to tax provision (c) (d)
0.06

 
0.06

 
0.12

 
0.18

Non-GAAP NET INCOME PER COMMON SHARE – DILUTED (f)
$
0.57

 
$
0.40

 
$
2.15

 
$
1.34

 
 
 
 
 
 
 
 
 
WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE
 
 
 
 
 
 
 
 
BASIC –GAAP (g)
47,327

 
45,017

 
46,434

 
43,599

 
BASIC - Non-GAAP (h)
47,327

 
45,018

 
46,434

 
43,628

 
 
 
 
 
 
 
 
 
 
DILUTED – GAAP (g)
51,990

 
48,317

 
50,094

 
46,512

 
DILUTED - Non-GAAP (h)
52,609

 
48,977

 
51,930

 
47,075

 
 
 
 
 
 
 
 
 



(a) Approximately $311 and $36,000 of undistributed earnings allocated to participating securities were not included in the determination of GAAP basic net income per common share for the three months and fiscal year ended June 30, 2014, respectively.
(b) Approximately $290 and $34,000 of undistributed earnings allocated to participating securities were not included in the determination of GAAP diluted net income per common share for the three months and fiscal year ended June 30, 2014, respectively,.
(c) Amortization of ASC Topic 718 stock-based compensation for the three months and fiscal year ended June 30, 2015 and 2014.
(d) The provision of income taxes used in arriving at the non-GAAP net income was computed using an income tax rate of 32.6% and 30.1% for the three months and fiscal year ended June 30, 2015, respectively, and 33.6% and 30.6% for the three months and fiscal year ended June 30, 2014, respectively.
(e) Approximately $365 and $42,000 of undistributed earnings allocated to participating securities were included in the determination of Non-GAAP basic net income per common share for the three months and fiscal year ended June 30, 2014, respectively.
(f) Approximately $335 and $39,000 of undistributed earnings allocated to participating securities were included in the determination of Non-GAAP diluted net income per common share for the three months and fiscal year ended June 30, 2014, respectively.
(g) 846 and 29,326 shares of unvested restricted stock awards were not included in the determination of GAAP basic and diluted net income per common share for the three months and fiscal year ended June 30, 2014, respectively.
(h) 846 and 29,326 shares of unvested restricted stock awards were included in the determination of Non-GAAP basic and diluted net income per common share for the three months and fiscal year ended June 30, 2014, respectively.

SOURCE: Super Micro Computer, Inc.
Super Micro Computer, Inc.
Howard Hideshima, 408-503-8000
SVP, Chief Financial Officer
ir@supermicro.com
or
Perry G. Hayes
SVP, Investor Relations
ir@supermicro.com
SMCI-F